India's biggest top copper smelter may re-open June 16 - sources

A view shows the backyard of Sterlite Industries Ltd's copper plant in Tuticorin, April 7, 2013.Stringer/Files

NEW DELHI (Reuters) - India's biggest copper smelter is likely to re-open on Sunday after a two-month shutdown which was prompted by complaints from nearby residents about its emissions and has caused tightness in supply of the metal.

A company source told Reuters on Friday that power for the smelter, which is run by Sterlite Industries STRL.NS, a unit of London-listed Vedanta (VED.L), had been turned on.

This source and one from the local pollution board said a court-appointed panel would visit the smelter on Sunday and the plant would re-open then.

The smelter, in the Tuticorin area of the southern Tamil Nadu state, was shut on March 30 after local people complained of breathing problems.

The company has denied there were any emissions above prescribed limits.

An environmental court said on May 31 it could re-open but opposition to this has continued.

The Supreme Court said on June 10 the smelter could resume as scheduled. A court had earlier stipulated that this should happen in the presence of an expert panel, ahead of a hearing for an appeal against its re-start.

Sterlite produces 30,000 tonnes of refined copper a month, or more than half of India's total production.

The smelter's closure had squeezed domestic supplies and boosted imports and prices, and the reopening will come as a relief to cable makers such as Finolex Cables Ltd (FNXC.NS) and Precision Wires India Ltd (PRWR.NS).

But it will further deplete already tight global stocks of copper concentrate, which is produced by mines and sold to smelters and refiners who treat the ore and refine the copper.

A string of mine accidents including a tunnel collapse at Indonesia's huge Grasberg mine and a rock slide at Rio Tinto's (RIO.AX) (RIO.L) operations in Utah have resulted in a scramble for concentrate.

Global miners pay treatment and refining charges (TC/RCs) to smelters to convert concentrate into refined metal, with the charges deducted from the sale price, based on London Metal Exchange (LME) copper prices.

When concentrate supply is tight smelters have to compete for the work and TC/RCs tend to fall.

The shortfall in concentrate supply has helped to underpin benchmark LME copper, which was up 0.4 percent on Friday. (Additional reporting by Susan Thomas in London; Writing by Jo Winterbottom; Editing by Mayank Bhardwaj and Anthony Barker)